A good friend of mine got a knock on the door the other day. It was someone from the bank who was coming to change the locks. That must have been a shock. Especially considering she rents! The bank didn’t know anyone was living there so they gave her til the end of the month to move out. Also, please keep in mind that she is married and has three young boys. Crashing on someone’s couch until she finds a place isn’t going to be easy. The good news is that there are lots of places to rent. All those homes that aren’t selling, someone needs to pay that mortgage. So she should have her pick of the litter in that regard. Maybe she will even end up paying less rent, who knows.
But I’m kinda pissed at her landlord. It’s guys like him that caused this horrible market in the first place. My friend called his other tenants and all of those homes are foreclosing too, not surprising! She moved into this house almost exactly 2 years ago. The landlord had just bought the home as new construction. I think it’s safe to assume that he went out and bought as many houses as he could, all with two year ARMs. Maybe he thought he would refinance, maybe he thought he would sell, but I doubt it was his original plan to foreclose on all of his properties. That is until the market went to hell of course. I don’t know how far behind on a mortgage you have to be before they foreclose, but clearly he hasn’t been paying his mortgages for a few months, at least. He has just been pocketing all that rent.
The price of my home has gone down $100,000 from the high. That is craziness. While I don't feel bad for people like my friends' landlord, I do feel bad for those who bought at the high. The people who weren't looking to make a quick buck, but just wanted a home for their family to live in, especially first time home buyers. I would be freaking out if I had paid $350,000 for my house and two years later it was only worth $250,000. UG!